P13-12A The income statement and unclassifiedstatement of financial position for E-Perform, Inc. follow:

E-PERFORM, INC. Statement of Financial Position December 31
	??2018??	??2017??
Assets
Cash	$   97,800	$  48,400
Held for trading investments	?128,000	?114,000
Accounts receivable	??75,800	??43,000
Inventory	?122,500	??92,850
Prepaid expenses	??18,400	??26,000
Equipment	?270,000	?242,500
Accumulated depreciation	?(50,000)	?(52,000)
Total assets	$662,500	$514,750
Liabilities and Shareholders' Equity
Accounts payable	$?93,000	$?77,300
Accrued liabilities	??11,500	???7,000
Bank loan payable	?110,000	?150,000
Common shares	?200,000	?175,000
Retained earnings	?248,000	?105,450
?Total liabilities and shareholders' equity	$662,500	$514,750

E-PERFORM, INC. Income Statement Year Ended December 31, 2018
Sales		$492,780
Cost of goods sold		185,460
Gross profit		307,320
Operating expenses		? 116,410
Income from operations		190,910
Other revenues and expenses
??Unrealized gain on held for trading investments	$14,000
??Interest expense	? (4,730)	?  ?9,270
Income before income tax		200,180
Income tax expense		45,000
Net income		$155,180

Additional information:

1. Prepaid expenses and accrued liabilities relate to operatingexpenses.
2. An unrealized gain on held for trading investments of $14,000was recorded.
3. New equipment costing $85,000 was purchased for $25,000 cashand a $60,000 long-term bank loan payable.
4. Old equipment having an original cost of $57,500 was sold for$1,500.
5. Accounts payable relate to merchandise creditors.
6. Some of the bank loan was repaid during the year.
7. A dividend was paid during the year.
8. Operating expenses include $46,500 of depreciation expense anda $7,500 loss on disposal of equipment.

Instructions

(a) Prepare the statement of cash flows, using the directmethod.

(b) E-Perform's cash position more than doubled between 2017 and2018. Identify the primary reason(s) for this significantincrease.